Africa must tap into lucrative hemp industry

A well-regulated medical cannabis or industrial hemp industry in Africa has potential to stimulate economic growth and create jobs across the entire continent, a new report reveals.

According to the latest New Frontier Data report titled: “The Africa Regional Hemp and Cannabis Report: 2019 Industry Outlook,” the continent could create over 320 000 jobs in states with legal, regulated markets.

The report was released to coincide with the InterCannAlliance symposium which was held in the resort town of Victoria Falls from May 24–25 this year.

Experts who met at the symposium urged African countries to fast track the approval of regulatory mechanisms to tap into an industry estimated at US$344,4 billion as at 2018.

“The jobs created are distributed in several sectors, and while the precise share of jobs to be created in each sector will vary between US markets and African markets, it is worth noting that job creation has the potential to span multiple sectors,” the report says.

“The number and diversity of jobs stimulated by a legal cannabis industry are measures of how the industry can support multi-sectoral economic development efforts. Furthermore, there over time will be increased opportunities to expand into other applications and sectors, as scientific research and technological innovation advance the plant’s industrial, medicinal, and nutritional applications.”

Researchers say the number and diversity of jobs stimulated by a legal cannabis industry could well cut across and support multi-sectoral economic development efforts.

In addition to this, the report notes that there could be increased opportunities to expand into other applications and sectors, as scientific research and technological innovation advance the plant’s industrial, medicinal, and nutritional applications.

Although cannabis is still illegal in most African countries, it has been grown on the continent since time immemorial.

A number of African countries including Zimbabwe have taken steps to decriminalise cannabis by adopting legalisation policies to tap into the opportunities that exist in this multi-billion dollar industry.

Lesotho was the first African nation to legalise medical cannabis in 2017, followed by South Africa’s functional legalisation of adult use in 2018.

Cannabis has sparked sharp interest and discussion across the continent where there is a growing interest to harness the plant for various medicinal and industrial purposes.

New Frontier Data estimates that Africa’s overall market accounts for 11 percent of the total global cannabis market, with US$37,3 billion in combined legal and illegal sales out of the total US$344,4 billion worldwide.

“It is also important to note that Cannabis, and the industries surrounding the plant, could help achieve several of the United Nation’s current Sustainable Development Goals (SDGs), including those of highest priority to African citizens, in fact many of the low-tech, low-cost, accessible applications of industrial hemp in particular could be activated relatively quickly to improve health standards across the continent, as well as to begin increasing national GDPs in support of stronger global economies in the years to come,” says Giadha Aguirre de Carcer, founder and head of New Frontier Data.

The new report is quite detailed and provides policy makers and analysts with a well-rounded, objective, fact-based overview of Africa’s emerging cannabis market trends, dynamics, opportunities, and challenges.

New Frontier Data believes strongly that the new report is useful to those making policy and regulatory decisions, and advancing research around cannabis’ medical and industrial applications.

In April 2018, Zimbabwe became the second African country to legalise medical cannabis, courtesy of the numerous economic reforms spearheaded by President Mnangagwa’s new administration.

Zimbabwe’s wide-ranging economic reforms under the mantra: “Zimbabwe is open for business,” all seek to modernise the economy, expand agricultural infrastructure, address health-care spending, reduce dependence on food imports, and increase agricultural export opportunities.

To demonstrate its commitment, in March this year, the Government issued its first licence to Precision Cannabis Therapeutics Zimbabwe, at a cost of US$46 000.

“The hemp industry is a boon to economical equity and balance. It is not wise to take such a valuable resource for granted any longer,” says Dr Zorodzai Maroveke, founder and head of the Zimbabwe Industrial Hemp Trust.

Given the imminent contraction and collapse of the global tobacco market in the coming future, experts say Zimbabwe should consider the cannabis plant as an alternative crop to diversify into.

They say growing hemp or medical cannabis could also present an opportunity to create jobs and reduce the country’s high unemployment rate.

High unemployment rates and a global decline in demand for tobacco crops has hit Zimbabwe and most other African countries hard.

“Malawi, Tanzania, Zimbabwe, and other south-eastern African countries that rely on tobacco exports should be preparing for the anticipated global decline in cigarette use. China alone —which consumes over 40 percent of the world’s cigarettes — is projected to lose more than 10 million cigarette smokers between 2015 and 2025, according to the WHO. Both medical cannabis and industrial hemp can be alternative crops to offset contraction of the tobacco market,” says the New Frontier Data report.

Experts believe turning to cannabis cultivation, despite its illegality in some parts of Africa, could help improve the livelihoods of the majority of farmers who need money to provide for the basic needs of their families.

International demand also offers a strong opportunity to unlock the potential value of Africa’s legally produced cannabis, which other researchers estimate could be worth up to US$7,1 billion annually by 2023.

Africa, other researchers note, has numerous advantages that include affordable land, low-cost labour and an experienced agricultural workforce, something that offers enormous opportunity to local start-ups and foreign companies looking to expand.

“Africa’s most sizeable cannabis markets are those with the largest populations: Nigeria ($15,3 billion), and Ethiopia ($9,8 billion), followed by Morocco ($3,5 billion), a noted source of hash for most of Europe,” the latest New Frontier Data report on cannabis says.

“The continent’s growth presents opportunities for both medical cannabis and industrial hemp. The plant and the industries surrounding it can support several of the UN’s Sustainable Development Goals (SDGs), including those that are highest priority for African citizens, and some of the low-tech, low-cost, accessible applications of industrial hemp can be quickly activated to support the health and growth of Africa in the coming decades.”

Global interest and the pace of change in the cannabis industry is massive and policy-makers in Africa need to move with speed to design and implement regulations that will ensure an efficient and legal exploitation of this multi-billion dollar industry.

Zimbabwe and most other African countries must adopt and approve medical cannabis and industrial hemp industries that will improve the fortunes of their economies and widen livelihood options of the majority of smallholder farmers.

Efforts must be made to remove barriers to investment, improve coordination among various agencies and enhance communication between governmental departments to quickly approve investments into the cannabis industry.

Delays in approvals may cost Zimbabwe and most Africa governments billions in lost revenue. It may even derail efforts by Zimbabwe to achieve its 2030 vision to become a middle income economy and even to realise some of its SDG targets.